Seven companies bid in UK 4G auction

Ofcom opens bidding for 28 lots of two LTE bands

Britain's largest mobile spectrum auction is under way, as seven operators are bidding to acquire new airwaves for next generation broadband services.

Ofcom is in charge of the bidding process and the auction has been split in such a way that at least four different carriers will be able to acquire enough spectrum for 4G services. A total of 28 lots of spectrum in two LTE bands, 800MHz and 2.6MHz, are up for grabs and the bidders are:

Everything Everywhere, the first to offer 4G in the UK, recently announced lower priced tariffs for its services. Telecoms regulation analyst at Ovum, Matthew Howett, described the move as a pre-emptive strike against competitors who will soon be launching their own offerings.

"It's fair to say that EE has attracted a fair degree of criticism not so much for the price of the 4G tariffs, but rather on the amount of data bundled at each level. EE was always going to have a difficult role to play being the first mover," Howett said. "However, its peers may be grateful for attempting to move away from an all-you-can-eat world for data to an attempt to monetise it.

"Offering a more generous, but capped, data allowance for 'super-users' is still consistent with that pragmatic move".

Ed Richards, Ofcom Chief Executive, described the auction as a significant milestone for the UK communications sector.

"It will release the essential raw material for the next wave of mobile digital services," Richards said. "This will change the way we consume digital media in both our personal and working lives and deliver significant benefits to millions of consumers and businesses across the country".

The bidding will last for weeks, but Ofcom expects the winners will be able to launch new services by late spring, or summer this year.

Analyst house IHS iSuppli estimates the number of LTE subscribers worldwide will double in 2013. An estimated 92.3 million used LTE in 2012 and as many as 198.1 million could embrace it by the end of 2013. More than a billion users are expected by 2016, making LTE the fastest growing wireless data standard in history.